In East Boston’s waterfront, The Eddy stands as a model of climate-resilient architecture. The two-building property, with over 250 luxury apartments, boasts stunning views of the Boston skyline but is also highly vulnerable to sea surges and flooding.
Anticipating these risks, developers elevated The Eddy by nine inches above the original site and implemented robust climate-resilient features, including an 18-inch floodgate, coastal vegetation, and walls designed to withstand 100-mile-per-hour winds.
These measures significantly reduced The Eddy’s flood loss risk from $10 million to $1 million, leading to a tenfold decrease in annual flood insurance premiums, alongside savings on wind insurance.
Since The Eddy’s completion in 2016, the frequency of extreme weather events has risen, making climate resilience not just a luxury but a practical necessity.
According to the Urban Land Institute (ULI), integrating climate resilience can lower operating expenses, enhance property marketability, and reduce future construction costs due to natural disasters. Lindsay Brugger of ULI emphasizes that resilience should be accessible to all, not just a premium feature.
The increasing extreme weather is crucial to secure insurance and cut expenses.A 2018 FM Global study highlights that every dollar invested in hurricane protection can save $105 in reduced loss exposure. Similarly, the 2019 National Institute of Building Sciences report suggests that modern building codes could save 600 lives and prevent 1 million injuries.
Insurance rates for commercial properties have surged by over 7% since 2017, driven partly by increased climate risks. Insurers have withdrawn from high-risk areas, leaving property owners facing steep premiums. For instance, a Florida office property’s wind insurance quote skyrocketed from $30,000 to $44,000 in just four weeks.
As traditional insurance becomes increasingly inaccessible, property owners are investing in climate-resilient features to mitigate risks.
In California, insurers offer discounts for properties with fire-resistant features. For example, a South Florida resort saved $500,000 annually by installing hurricane-proof windows and elevating electrical units.
In Miami Gardens, Florida, weather-proofing renovations allowed a property owner to secure a $47 million wind insurance policy after previously being constrained by limited coverage options. Holly Neber of AEI Consultants notes that climate resilience is now integral to effective risk management and investment.
Thus, climate resilience is evolving from an optional upgrade to a crucial component of modern real estate investment, essential for securing insurance and reducing long-term costs.